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Marketing Strategies / Strategic Marketing
Case Study

Coca-Cola’s Re-entry into the US RTD Tea and Coffee Market

Publication Year : 2006

Authors: Roopa Devi. B & Aruna N

Industry: Beverages

Region:USA

Case Code: MKS0102B

Teaching Note: Not Available

Structured Assignment: Not Available

OR

Abstract:

Coca-Cola, one of the leading players in the soft drinks industry in the US, entered the RTD tea and coffee market in 1991, but failed to succeed in its efforts. In 2001, Coca-Cola re-entered the RTD tea and coffee market by acquiring Planet Java brand but witnessed failure due to stiff competition from Starbucks and Pepsi.

In 2005, due to the rising concern over obesity and other health-related issues among consumers in the US, Coca-Cola, the No.1 in the soft drink market, witnessed a decline in its market share by 4.2%. To compensate over its loss and to expand further, Coca-Cola decided to enter the ready-to-drink (RTD) tea and coffee market. Though Coca-Cola had failed in its attempt twice earlier, it made a re-entry into the US RTD tea and coffee market in 2006 by launching a mid-calorie drink, Coca-Cola Blak. It was confident in succeeding this time, but analysts raised their doubts about its sustenance due to the domination of Starbucks which had partnered with Pepsi. Moreover, as RTD tea and coffee was a small and growing market, analysts were skeptical about the success of Coca-Cola in the US RTD tea and coffee market.

Pedagogical Objectives:

To understand the US RTD Tea and Coffee market

To understand the soft drink market in US

To understand Coca Cola’s re-entry strategies in the RTD Tea and Coffee market

To analyse whether Coca-Cola will succeed in the US RTD tea and coffee market in its third attempt.